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GM strike is a surprising modern test of the power of workers versus corporations

Its fight between hourly factory workers and a multibillion dollar global corporation is providing a glimpse of what the future may hold for tech workers and tech executives, say Silicon Valley experts.

“People are looking to Detroit as a model for how you can unionize and collectively mobilize against management,” said Margaret O’Mara, author of “The Code: Silicon Valley and the Remaking of America” and a professor of history at the University of Washington.

A woman waves out the window while showing support for UAW members on strike against General Motors outside of Flint Assembly as she drives along Van Slyke Road in Flint on Tuesday, September 24, 2019(Photo: Ryan Garza, Detroit Free Press)

“There’s some commonalities,” she said. “Workers at General Motors are saying, ‘Look, you guys are swimming in profit and you should not be cutting our health care. We need to be more like partners in this.’ So, too, are workers at these very large tech companies saying, ‘Hey, you, you’re swimming in profit. You have all these contract workers you’re not treating fairly or as full employees and giving them benefits. We don’t like what you’re doing and we’re going to push back.’ ”

In fact, a key sticking point in the union talks with GM is what to do about thousands of “temporary” workers who earn a bit more than half the wage of workers standing next to them. Full-time workers are fighting for those UAW members who have no clear path to permanent jobs.

As some 46,000 hourly auto industry employees finish their second week on strike nationwide, bringing to a halt 55 GM sites in 10 states, the UAW is in the spotlight as an example of what an $800 million strike fund can do. It has budgeted $250 a week in strike pay for members and didn’t back down from its positions when its adversary abruptly announced on Day 2 of the strike a decision to shift health care coverage from GM to COBRA — which would be paid by the Detroit-based international union. After days of criticism, GM backed off on that move.

'Bad rap'

Silicon Valley entrepreneurs known for innovation say the UAW-GM contract negotiations could play a key role in determining whether income inequality and divisions continue growing between workers and top employees.

Jared Fliesler, who held senior positions at Google and worked with Jack Dorsey in the early days to grow Square into the $25 billion mobile payments business it is today, is among those watching closely.

“It sounds like the employees in good financial positions are lifting their fellow workers and taking a stand for fairness, even when the fight isn't their own. And I think that’s amazing,” said Fliesler, who in 2013 at age 28 was the youngest general partner at a venture capital firm in Silicon Valley.

“Unions often get a bad rap. But there’s a time and place and a reason why they were formed. This is that time and place,” said Fliesler, now chief operating officer at Scribd, a subscription-based service that has been compared to Netflix for readers.

Google unionizing

“I look at Detroit and see GM workers on strike,” historian O’Mara said. "Then I have people call me to say Google contractors are unionizing in Pittsburgh. The common thread is this larger public conversation is about the power of corporations — of which CEO pay is part of it — and the power of workers.”

As the economy grows and the stock market is booming, real income remains flat, she said. “People feel like, ‘OK, there’s a boom and I’m being left behind. People are really feeling the unfairness of it all.’ You see that in tech and you see it in Detroit.”

Professor Margaret O'Mara, an historian based at the University of Washington, said Detroit and Silicon Valley have more in common than people realize. This photo was taken in downtown Seattle in October 2018.(Photo: Jim Garner)

Part of the reason Detroit brings a unique credibility to the discussion is because of its history as the world's most innovative city back before 1930 — pushing the boundaries of mechanical engineering, design, production, labor and wages.

“You think about Ford’s $5-a-day wage,” O’Mara said. “I teach students how Detroit invented weekends and the five-day workweek. They found new ways to increase productivity, scale up and deliver great products.”

Grueling physical labor

And it has been the “compact” between organized labor and the automotive industry that has made so much possible, observers say.

“We don’t have big factories in Silicon Valley where people are punching time cards and doing grueling physical labor,” said Russell Hancock, president and CEO of Joint Venture Silicon Valley, a consortium of business and government leaders working to address regional challenges.

“We should be understanding and cultivating deep respect for people who actually have to show up, fill shifts, use their hands, sweat and do things that are physical.”

He identified a developing trend in Silicon Valley where industry leaders are more mindful of workers at all levels and coping with pay issues and disparity that may parallel issues facing the Detroit Three.

“I’m talking about people who are driving the Google buses and working in kitchens and people doing landscaping,” Hancock said. “There are huge controversies developing about how those people should be treated in these corporations. And shouldn’t they have a piece of the company? Shouldn’t they also be entitled to stock and equity and ownership? That’s the conversation Silicon Valley is starting to have. It’s where we’re headed, that we shouldn’t have these bifurcations.”

America is seeing a pivot toward workers as owners, as agents, rather than employees, Silicon Valley observers said.

Russell Hancock is among leaders in Silicon Valley who say what happens in Detroit with labor relations is watched closely. “There’s a culture and an ethos in Silicon Valley that when you’re successful, then you help other people be successful," he said. The CEO of Joint Venture Silicon Valley is pictured speaking at the annual State of Silicon Valley conference in San Jose, California on February 15, 2019.(Photo: Sterling Hancock)

However, when debate spotlights on issues like health care, Silicon Valley observers say they’re mystified by traditional approach to solutions discussed in Detroit, which focus mostly on cutting coverage.

“We see it in the trades, in building and construction, and they’re organized and unionized and on a campaign — not so much about work conditions and compensation but more about how they’re viewed. They want to be viewed and treated as professionals and because they’re entitled to a life, to a home, home ownership and the ability to put their kids through school,” Hancock said.

“There’s a culture and an ethos in Silicon Valley that when you’re successful, then you help other people be successful," said the son of a lifetime Boeing electrical engineer whose widow survives on his pension. “That’s where the whole venture capital industry came from. It didn’t come out of the financial sector. It didn’t come out of Wall Street. It came from CEOs and successful company founders being frustrated that it was too hard for entrepreneurs to raise money so they raised it themselves and they mentored and they created this industry.”

Union salary for a family of six

These are the values that built this country and what make it strong, he said.

David Packard, co-founder of Hewlett-Packard, famously touted the idea that a company’s responsibility to its employees, their families and the communities in which they did business was as important as it was to its shareholders, said Carl Guardino, CEO of the Silicon Valley Leadership Group, a public policy trade association that counts GM among its 360 members.

Consumer spending accounts for 70% of the American economy, while business spending is 30%, he noted. And apart from the overall economy, workers must preserve the right to exercise a “collective united voice.”

“I was raised in a union household and worked my way through college as a union drywall mechanic. I had the great satisfaction of strapping a tool belt around my waist every day when I wasn’t in class and working hard for a living. I was represented by a great union that made sure we had a 40-hour workweek and OSHA standards and safety provisions and decent health care,” said Guardino, who grew up in San Jose, California. “On one good union drywall salary, my dad could provide for a family of six.”

Backlash

While Detroit innovation is praised by Silicon Valley executives, the economic trauma sustained by the industrial Midwest during the Great Recession is beyond comprehension on the West Coast, experts said. And that has taken a corrosive toll.

“So many Americans, not simply UAW workers, have given their lives and worked hard, been innovative, created successes, and all of a sudden they find out they're not stakeholders, they’re expendable,” said Harley Shaiken, a University of California at Berkeley professor and national labor analyst.

It was no surprise, he said, that nonunion workers sometimes bash union protesters.

“When people are getting squeezed hard, they lash out, and often not at the top. It’s too distant," Shaiken said. "Someone slightly above your level creates the resentment. That means you’re discouraged, you're cynical, you don’t see possibilities. Here’s something I can attack. They’re doing what I’m doing on the job but they have it much better. Rather than figure out, ‘How do I get it myself?” it’s just anger and frustration.”

People in Michigan, still recovering from economic devastation a decade ago, are scarred, he said. Yet UAW members are still fighting for workers who lack job security and benefits rather than just focus on themselves, Shaiken said.

“This isn’t a strike just about dollars and cents. It’s about values,” he said, articulating a feeling shared again and again on the picket lines in Flint.

“If you want to know what Detroit was like in the 1950s and 1960s, look at this picket line and the sense that these people are us, we’re in this together and we’re stronger if we stand together. That seems like a throwback to the past but in fact, these GM strikers are saying: This is the future. We’re in this together. That’s the soul of the union.”